Share
Despite repeated guidance from the IRS that employer payment plans violate insurance reforms under the Affordable Care Act (the “ACA”), many small employers continue this arrangement of reimbursing employees for their cost of health insurance purchased on the individual market. Under current law, employers who do not sponsor a group health plan but instead reimburse their employees for their premiums for individual health coverage are violating the Patient Protection and Affordable Care Act (ACA) and are running the risk of being liable for an excise tax of $100 per day per reimbursed employee (or $36,500 per employee per year). In response to employer calls for relief, the House of Representatives passed the Small Business Healthcare Relief Act of 2016 (H.R. 5447) on June 21, 2016. The Small Business Healthcare Relief Act is a bi-partisan bill which would permit an employer with fewer than 50 employees to reimburse premiums paid by employees for insurance purchased in the individual market on a pre-tax basis. This bill has been strongly supported by the Small Business Council of America. The bill is now awaiting action in the Senate where it has been assigned to the Senate Finance Committee.
For more information about the Small Business Healthcare Relief Act contact Attorney Sharon Freilich, sfreilich@pullcom.com or Attorney George Kasper, gkasper@pullcom.com.
This blog/web site presents general information only. The information you obtain at this site is not, nor is it intended to be, legal advice, and you should not consider or rely on it as such. You should consult an attorney for individual advice regarding your own situation. This website is not an offer to represent you. You should not act, or refrain from acting, based upon any information at this website. Neither our presentation of such information nor your receipt of it creates nor will create an attorney-client relationship with any reader of this blog. Any links from another site to the blog are beyond the control of Pullman & Comley, LLC and do not convey their approval, support or any relationship to any site or organization. Any description of a result obtained for a client in the past is not intended to be, and is not, a guarantee or promise the firm can or will achieve a similar outcome.
About Our Labor, Employment and Employee Benefits Law Blog
Alerts, commentary, and insights from the attorneys of Pullman & Comley’s Labor, Employment Law and Employee Benefits practice on such workplace topics as labor and employment law, counseling and training, litigation, union issues, as well as employee benefits and ERISA matters.